Our Business Model
Social enterprises “are businesses that use entrepreneurial methods to accomplish social goals and/or fee profits to a parent charity or non-profit to enable it to fulfill more of its own social mission. They are revenue-generating businesses with primarily social objectives whose surpluses are reinvested for that purpose in the business or in the community, rather than being driven by the need to deliver profit to shareholders and owners.”
While some non-profits allow their social enterprises to run directly out of their non-profit organizations, JFCAC made the decision to put avenues in place that would protect the assets of its non-profit status from the potential liabilities of any of the earned income from its for-profit endeavors. One of the accepted ways in which to do this is via the establishment of a C- Corporation with the non-profit serving as the sole shareholder. A C-Corporation is an entity recognized under U.S. federal income tax law as a corporation that is taxed separately from its owners / shareholders. In order to proceed, JFCAC engaged legal assistance to develop a C- Corporation, envisioning that future social enterprises would be set up as single-member limited liability Companies (LLCs) operating as subsidiaries of the C-Corporation. A Single Member LLC is a limited liability company having only one member. The member of an LLC is the owner of the LLC. They are equivalent to partners in a partnership. A single member LLC is taxed as a sole proprietorship. The established structure is depicted below.
While some non-profits allow their social enterprises to run directly out of their non-profit organizations, JFCAC made the decision to put avenues in place that would protect the assets of its non-profit status from the potential liabilities of any of the earned income from its for-profit endeavors. One of the accepted ways in which to do this is via the establishment of a C- Corporation with the non-profit serving as the sole shareholder. A C-Corporation is an entity recognized under U.S. federal income tax law as a corporation that is taxed separately from its owners / shareholders. In order to proceed, JFCAC engaged legal assistance to develop a C- Corporation, envisioning that future social enterprises would be set up as single-member limited liability Companies (LLCs) operating as subsidiaries of the C-Corporation. A Single Member LLC is a limited liability company having only one member. The member of an LLC is the owner of the LLC. They are equivalent to partners in a partnership. A single member LLC is taxed as a sole proprietorship. The established structure is depicted below.
For purpose of clarity, the IRS Ruling on these issues is as follows: “While 501(c)(3) nonprofit organizations are generally exempt from federal income tax, they may be liable for unrelated business income tax (UBIT) on the income generated from activities that are not related to their exempt purposes. The purpose of UBIT is to ensure that tax-exempt organizations do not have an unfair competitive advantage over for-profit entities when a tax-exempt organization engages in commercial business activities. While the non-profit organization could generate income from unrelated business activities and simply pay any UBIT incurred, at some point, the activity may become so substantial that it could jeopardize the tax-exempt status of the nonprofit organization. Since there is no bright line rule for how much unrelated business activity the Internal Revenue Service (IRS) considers too much for the nonprofit to operate, moving those activities to a separately-incorporated, taxable legal entity, such as a C-corporation subsidiary, can avoid concerns about crossing that line. The nonprofit carries out the activities in a separate but related entity, which will pay income tax on the net income from the activities and which can then remit the after-tax profits as a dividend or as a grant to the nonprofit parent. Dividends received by tax-exempt organizations are considered passive income, and not subject to UBIT. Note, that when choosing a taxable entity for the profitmaking business, it is important to ensure the entity is not considered “pass-through” for tax purposes. Activities of pass-through entities, such as partnerships, limited liability companies (LLCs) and S-corporations, are generally attributed to their owners. Further, single-member LLCs are generally disregarded for federal tax purposes. The IRS will attribute the profit-making activities carried on by the pass-through entity to the activities of the nonprofit owner, which undermines the tax purpose of creating a separate for-profit subsidiary.” (Quoted from the IRS Website)
The mission of JFCAC is to serve individuals and families through partnerships, empowerment, and education in order to strengthen and improve the entire community. It was determined, while in the planning phases, by JFCAC’s Executive Team and Board that all subsidiaries created by JFCAC’s C-Corporation needed to remain in line with its mission as much as possible.
The mission of JFCAC is to serve individuals and families through partnerships, empowerment, and education in order to strengthen and improve the entire community. It was determined, while in the planning phases, by JFCAC’s Executive Team and Board that all subsidiaries created by JFCAC’s C-Corporation needed to remain in line with its mission as much as possible.
The Road to Self Suffiecincy
Why would a non-profit like Jefferson Franklin Community Action want to open a C-Corporation with various for-profit social enterprises?
The majority of JFCAC’s revenue is from State and Federal grants. The agency’s Leadership Staff is constantly exploring how best to ensure the agency’s existence considering continual funding cuts. In other words, JFCAC is charged with the ongoing challenge of how to increase its ability to be less dependent on Federal and State funding.
In 2015 The Executive Team, Leadership Team, and Board at JFCAC established a desire to focus on new programs that were not what had commonly been referred to as “Band-Aid Approaches.” The definition of a Band-Aid Approach is “a hasty solution that covers up the symptoms but does little or nothing to mitigate the underlying problem.” Many of the existing anti-poverty programs are based on “Band-Aide Approaches. While they have been successful in helping people, they have not always been successful in building self-sufficiency. Since the goal of Community Action is to mitigate poverty, JFCAC decided to strengthen its existing amazing core programs that are so vital, while also building new approaches that would work to cure the root of the problems, not just eliminate the symptoms. With that in mind, a core principle emerged for the agency. This principle was to base all new programs and revitalize existing programs on self-sufficiency principles. In other words, create programs that assist those served in becoming more self-sufficient and less reliant on the programs that JFCAC offers. While the agency loves those that are served by its programs, a true success would be a customer base that no longer needed services from JFCAC or any other organization like JFCAC. Hence, the new backbone of JFCAC’s Programming was created: Self – Sufficiency.
However, after great thought it became apparent that JFCAC was expecting more of its Programs and Clients than of itself. Self Sufficiency …what a great thought? Discussion began around the question, “is self-sufficiency where the agency needs to go?” As mentioned above, with the continued threats of funding cuts the answer was easy and clear – YES! Not only should we create programs that are based on the expectation of self-sufficiency for those that JFCAC serves, but JFCAC should itself begin the quest to become self-sufficient as a corporation.
Sometimes deciding in life to move in a direction is the easiest part – paving the way to get there can present the challenges. So, for JFCAC after the above decision was made, the remaining question was, “How does the agency get there?” How could JFCAC reach a point of being less reliant on Federal and State dollars and more reliant on itself? Lengthy discussion began with the Board, Executive Team, Leadership Team, and employees at JFCAC regarding the ways in which the agency could increase dollars not provided by the State or Federal Government. In other words, simply put, how would the agency achieve increasing dollars that were not restricted or dependent on others to provide to the agency?
Collectively, a decision was made to increase these unrestricted dollars in three ways: Fundraising, Medicaid Fee-for-Service Opportunities and the creation of Social Enterprises. Over the past three years JFCAC has placed great emphasis on all three of these areas, including but not limited to the establishment of Partner’s Realizing Opportunity (PRO) JFCAC’s for profit arm.
The majority of JFCAC’s revenue is from State and Federal grants. The agency’s Leadership Staff is constantly exploring how best to ensure the agency’s existence considering continual funding cuts. In other words, JFCAC is charged with the ongoing challenge of how to increase its ability to be less dependent on Federal and State funding.
In 2015 The Executive Team, Leadership Team, and Board at JFCAC established a desire to focus on new programs that were not what had commonly been referred to as “Band-Aid Approaches.” The definition of a Band-Aid Approach is “a hasty solution that covers up the symptoms but does little or nothing to mitigate the underlying problem.” Many of the existing anti-poverty programs are based on “Band-Aide Approaches. While they have been successful in helping people, they have not always been successful in building self-sufficiency. Since the goal of Community Action is to mitigate poverty, JFCAC decided to strengthen its existing amazing core programs that are so vital, while also building new approaches that would work to cure the root of the problems, not just eliminate the symptoms. With that in mind, a core principle emerged for the agency. This principle was to base all new programs and revitalize existing programs on self-sufficiency principles. In other words, create programs that assist those served in becoming more self-sufficient and less reliant on the programs that JFCAC offers. While the agency loves those that are served by its programs, a true success would be a customer base that no longer needed services from JFCAC or any other organization like JFCAC. Hence, the new backbone of JFCAC’s Programming was created: Self – Sufficiency.
However, after great thought it became apparent that JFCAC was expecting more of its Programs and Clients than of itself. Self Sufficiency …what a great thought? Discussion began around the question, “is self-sufficiency where the agency needs to go?” As mentioned above, with the continued threats of funding cuts the answer was easy and clear – YES! Not only should we create programs that are based on the expectation of self-sufficiency for those that JFCAC serves, but JFCAC should itself begin the quest to become self-sufficient as a corporation.
Sometimes deciding in life to move in a direction is the easiest part – paving the way to get there can present the challenges. So, for JFCAC after the above decision was made, the remaining question was, “How does the agency get there?” How could JFCAC reach a point of being less reliant on Federal and State dollars and more reliant on itself? Lengthy discussion began with the Board, Executive Team, Leadership Team, and employees at JFCAC regarding the ways in which the agency could increase dollars not provided by the State or Federal Government. In other words, simply put, how would the agency achieve increasing dollars that were not restricted or dependent on others to provide to the agency?
Collectively, a decision was made to increase these unrestricted dollars in three ways: Fundraising, Medicaid Fee-for-Service Opportunities and the creation of Social Enterprises. Over the past three years JFCAC has placed great emphasis on all three of these areas, including but not limited to the establishment of Partner’s Realizing Opportunity (PRO) JFCAC’s for profit arm.
Our Nonprofit Connection - Community is where our heart is.
JFCAC is a non-profit corporation that was established in 1965 with a focus on serving families and communities living in the crisis of poverty. The agency’s history dates back to 1964 when President Lyndon B. Johnson signed into law the Economic Opportunity Act of 1964 and declared a “War on Poverty.” As a result of this act, a battery of anti-poverty programs, which were aimed at advancing, elevating, and promoting the economic, educational, civic, and recreational conditions of the poor, were created. Community Action (CA) was one such program.
On April 9, 1965, the Jefferson County Community Opportunity Corporation was incorporated to begin providing local Community Action programming to the residents of Jefferson County, Missouri. On February 19, 1969, the Jefferson County Community Opportunity Corporation expanded service provision into Franklin County, Missouri, and amended its name to the Jefferson Franklin Community Action Corporation (JFCAC).
To date, the two-county region of Jefferson and Franklin continues to be JFCAC’s service community, with the residents of the counties being the agency’s customer-base. The community is located directly south and west of the Metro-St. Louis area. Jefferson County ranks as the sixth most populated county in Missouri and Franklin ranks as the tenth most populous (U.S. Census Data, 2017). The two-county community has distinct areas of wealth, contrasted with significant poverty. Parts of the community are very developed, and “suburban,” while others are very rural, and underdeveloped. The developed areas are rich with resources, while the rural parts have fewer resources available.
JFCAC is part of a national poverty fighting network of Community Action Agencies (CAAs) that are committed to the same promise: “Community Action changes people’s lives, embodies the spirt of hope, improves communities, and makes America a better place to live. We care about the entire community, and we are dedicated to helping people help themselves and each other.” The mission of JFCAC is to “serve individuals and families through partnerships, empowerment, and education in order to strengthen and improve the entire community.”
JFCAC’s Board approved fiscal year 2019 Annual Operating Budget was $17.3 million. Its programs emphasize the development of community partnerships designed to respond to the needs of impoverished families in Franklin and Jefferson Counties.
As a corporation, JFCAC has been subject to the same life cycle as other companies. It is apparent by the above history of the agency that JFCAC is not in the start-up phase of its life cycle. It has instead surpassed that stage and moved into the growing and mature stages. As depicted in the below Life Cycle Chart, JFCAC has also experienced many renewals over its 50 plus years of existence. It has stood as a pillar and as a beacon of light for its residents, continually shifting to meet the needs of those who reside in Jefferson County and Franklin County, Missouri.
On April 9, 1965, the Jefferson County Community Opportunity Corporation was incorporated to begin providing local Community Action programming to the residents of Jefferson County, Missouri. On February 19, 1969, the Jefferson County Community Opportunity Corporation expanded service provision into Franklin County, Missouri, and amended its name to the Jefferson Franklin Community Action Corporation (JFCAC).
To date, the two-county region of Jefferson and Franklin continues to be JFCAC’s service community, with the residents of the counties being the agency’s customer-base. The community is located directly south and west of the Metro-St. Louis area. Jefferson County ranks as the sixth most populated county in Missouri and Franklin ranks as the tenth most populous (U.S. Census Data, 2017). The two-county community has distinct areas of wealth, contrasted with significant poverty. Parts of the community are very developed, and “suburban,” while others are very rural, and underdeveloped. The developed areas are rich with resources, while the rural parts have fewer resources available.
JFCAC is part of a national poverty fighting network of Community Action Agencies (CAAs) that are committed to the same promise: “Community Action changes people’s lives, embodies the spirt of hope, improves communities, and makes America a better place to live. We care about the entire community, and we are dedicated to helping people help themselves and each other.” The mission of JFCAC is to “serve individuals and families through partnerships, empowerment, and education in order to strengthen and improve the entire community.”
JFCAC’s Board approved fiscal year 2019 Annual Operating Budget was $17.3 million. Its programs emphasize the development of community partnerships designed to respond to the needs of impoverished families in Franklin and Jefferson Counties.
As a corporation, JFCAC has been subject to the same life cycle as other companies. It is apparent by the above history of the agency that JFCAC is not in the start-up phase of its life cycle. It has instead surpassed that stage and moved into the growing and mature stages. As depicted in the below Life Cycle Chart, JFCAC has also experienced many renewals over its 50 plus years of existence. It has stood as a pillar and as a beacon of light for its residents, continually shifting to meet the needs of those who reside in Jefferson County and Franklin County, Missouri.
ProCAre Solutions, LLC
ProCAre Solutions, LLC is a Social Enterprise that was established in 2019. ProCAre Solutions is a small business that offers an array of resources from trainings to consultation to non-profits nationwide. ProCAre Solutions’ trainers and consultants have years of experience and have completed rigorous training that allows them to be equipped to offer great educational opportunities to those in need.
As a Social Enterprise, ProCAre Solutions is proud to acknowledge that our proceeds support poverty programs in Jefferson and Franklin County Missouri delivered by Jefferson Franklin Community Action Corporation (JFCAC).
ProCAre Solutions has the goal of becoming a one stop shop for training needs. While we are presently still growing our goal is to continue to add more and more trainings and consultants as the demand dictates. We presently offer a resource catalog of trainings ranging from social/emotional resources to implementation of practices throughout organizations to help with compliance measures.
As a Social Enterprise, ProCAre Solutions is proud to acknowledge that our proceeds support poverty programs in Jefferson and Franklin County Missouri delivered by Jefferson Franklin Community Action Corporation (JFCAC).
ProCAre Solutions has the goal of becoming a one stop shop for training needs. While we are presently still growing our goal is to continue to add more and more trainings and consultants as the demand dictates. We presently offer a resource catalog of trainings ranging from social/emotional resources to implementation of practices throughout organizations to help with compliance measures.
